A Blueprint for OSFI’s Transformation 2022 - 2025

Message from the Superintendent

Colleagues -

On September 17, 2021, I wrote to you about OSFI’s risk environment. In that note, I explained the unanimous position of the Executive Committee: that OSFI must assume and plan for more frequent volatility storms, similar to those of the past twenty years and of varying degrees of intensity.

This volatility will arise from identifiable sources. Climate change will alter the cash flows generated by some capital assets and occasionally trigger noticeable changes in valuation and in our economic environment. The digitalization of financial services will affect all business models and threaten an unknowable few.

Climate change and digitalization represent the known unknowns in OSFI’s risk environment. As risk managers, we at OSFI must also make plans on the assumption that other macro sources of volatility will emerge from unknown places.

Therefore, the Executive Committee agreed without hesitation to craft a transformational effort to position OSFI to urgently and constructively respond to our significantly heightened risk environment. We observed that we have no time to waste on focusing OSFI on the future. The challenges are significant; all of OSFI will be needed on this next journey and each of you will be empowered to participate. Therefore, we will pursue our transformation in broad daylight and bring everyone at OSFI into the conversation early and often … hence my letter of September 17, 2021 and hence this transformational Blueprint for OSFI.

Why is transparency in this bold endeavor so important to us? Because we believe if we enfranchise our colleagues not only in the execution of OSFI’s transformation but in its design and articulation, OSFI will move faster and more assuredly towards our “true north” destination. We also do this because we respect everyone who wakes up everyday and goes to work at OSFI to protect Canadians. Each of us are worthy of enfranchisement in our transformational journey.

What does OSFI’s “true north” look like? We offer the following description and welcome constructive challenge if we haven’t captured the destination in its entirety:

• Vision: We are transforming OSFI to ensure that we thrive in intensifying uncertainty so that the public’s confidence in a sound financial system remains unwavering.
• Mission: We will achieve this by:
  • ensuring that at the core of all we do is a culture of curiosity that fosters acceptance of diverse mindsets, where it is safe to be different and safe to fail;
  • increasing our personal and organizational agility;
  • being courageous and bold in making decisions that are driven by our risk appetite and informed by exceptional analysis and insights;
  • taking actions that are timely, well understood in terms of the risk trade-offs involved, and result in followership and influence; and
  • being proactive in influencing policy-making to strengthen public confidence in the Canadian financial system.       

Part of our commitment to transparency means that we will share with each of you not the perfect transformational plan, ready for implementation, but rather periodic and comprehensive descriptions of where OSFI is on its transformational journey. So, in this document you will find a blueprint for OSFI’s transformation, in which we articulate in more detail the case for change, the major dimensions for OSFI’s transformation, our “true north” destination and our aspiration for each of the transformational initiatives.

In other words, we present a compass to guide us toward our envisioned future and not a map with precise directions. We do so with the confidence that each of you will bring to life the transformation and help us map out our way forward in more detail.

I hope by engaging in this level of transparency, each of you will make the following conclusions:

• We believe there is immense urgency for transforming OSFI given the speed at which our risk environment is changing;
• Our transformation will result in more opportunities for career growth, not less; we will not shrink our way to our “true north”; and
• We understand that all of us must adapt in concert with one another; transparency not secrecy will be the celebrated behavior.

Moreover, I believe we all stand to benefit immensely from being part of a remarkable transformation of a remarkable institution. Our service during this era at OSFI will become a hallmark of distinction and source of pride for us all.

In 1951, a Scottish mountaineer named William Hutchison Murray, inspired by the writings of Johann Wolfgang von Goethe, wrote about the mindset required to begin and sustain a great endeavor (in his case, climbing a mountain)^{Footnote 1}:

Until one is committed there is hesitancy, the chance to draw back, always ineffectiveness. Concerning all acts of initiative (and creation), there is one elementary truth, the ignorance of which kills countless ideas and splendid plans: that the moment one definitely commits oneself, then [fortune] moves too.

All sorts of things occur to help one that would never otherwise have occurred. A whole stream of events issues from the decision, raising in one’s favour all manner of unforeseen incidents and meetings and material assistance, which [one] could have dreamt would have come [their] way. … Whatever you can do, or dream you can, begin it. Boldness has genius, power, and magic in it.

I have referred often to this passage when commencing a new adventure in my life. As we begin this adventure together, I hope you will find this passage as heartening and inspiring as I do.

Regards,

Peter Routledge
Superintendent

Section A: The Case for Transformation

OSFI is embarking on an exciting transformational journey. One that will build on our past successes, using them to help us chart a path forward to our future. Through this journey we will:

• expand our skills,
• increase our agility, and
• rebalance our focus.

Why are we undertaking the journey and why now? This transformation recognises that the risk environment in which we operate has fundamentally shifted: the risks we face now are much more volatile, complex, interrelated, and existential than they have been in the past; they are challenging our assumptions about the scope of sound prudential oversight and the capabilities required of OSFI in order to remain effective.

Since its establishment in 1987, OSFI has contributed to the soundness of Canada’s financial system by regulating and supervising banks, most insurance companies as well as a significant portion of private pension plans. As such, OSFI has been in the business of risk management for some time and our success reflects how well we have mitigated risk on behalf of Canadians. We are also fortunate that we house the Office of the Chief Actuary (OCA). The OCA contributes to financial system oversight by helping to ensure that social programs and public sector pension and insurance arrangements remain sound and sustainable for Canadians.

OSFI’s purpose is to contribute to public confidence in the Canadian financial system. This means Canadians feel safe using the institutions and pension plans that we regulate by knowing that their money, policy, or plan will be there when they need or want it. However, up until now, our contributions to public confidence have been a result of how we regulate and supervise individual institutions but not the driver of our approach. An important aspect of our transformation will be changing how we deliver our mandate by re-prioritizing our purpose such that it drives the execution of our mandate. The degree of complexity and interconnectedness of the risk environment means that the boundaries of our role and influence are expanding; this requires us to refocus and refine how we approach and execute our mandate to contribute to public confidence in the financial system.

Equally important to refocussing how we deliver our mandate will be the expansion of OSFI’s own enterprise risk management (ERM) capabilities, including risk management tools, data analytics, and risk appetite. This approach will help us to operate more effectively by honing trade-offs and priority setting in both strategic and operational management. As such, ERM must be integrated in all we do - including how we are structured - to ensure that our people, processes, and technology are robust and resilient to whatever presents itself.

Finally, having a strong foundation in our people and culture capabilities will ensure a successful transformation. OSFI needs to invest in our people to ensure we are ready for the demands of our mandate. Employee feedback over recent years has identified the need to more clearly articulate and reinforce the desired behaviours and culture for all staff at OSFI. Commitments and promises amongst all of us on culture and behaviour are mission critical.

For many, the signals of the need for change have been there for some time, but the conclusion is now different: OSFI must transform itself, not reform itself, in order to deliver on its mandate successfully.

Section B: The Foundational Elements of the Transformation

(1) A Change in How We Use Our Mandate

The OSFI Act states “The purpose of this Act is to ensure that financial institutions and pension plans are regulated by an office of the Government of Canada to contribute to public confidence in the Canadian financial system.” The Act then goes on to define objects for both financial institutions and pension plans, including the role of prudential regulation and supervision in determining financial condition and promoting policies and procedures designed to control risk.

Up until now, we have taken the approach that OSFI’s mandate is protecting depositors, policyholders, financial institution creditors and pension plan members, while allowing financial institutions to compete and take reasonable risks. In doing this, OSFI supports the government’s objective of contributing to public confidence in the Canadian financial system. Our contribution to public confidence - via the regulation and supervision of individual federally regulated financial institutions (FRFIs) and federally regulated pension plans (FRPPs) - is a byproduct or consequence of what we do, but not the driver of what we do.

Our transformative vision will make strengthening public confidence in Canada’s financial system the key driver of all we do. This aligns with the broader demands of the risk environment where we need to influence beyond our traditional role. To do this, we will be risk-based in the broadest sense, rebalancing our strategic response to financial system risks with prudential regulation and supervision activities.

While the mandate of the OCA is different from the mandate of the rest of OSFI, the work of the OCA contributes to the public confidence in Canada’s social programs and public sector pension and insurance programs. In line with the OSFI transformative vision, it is important to the OCA to make public confidence in programs under its responsibility one of the key drivers of its activities.

The objective is to maximize OSFI’s influence in all matters pertaining to its mandate. This will mean being more forthright in sharing our perspectives and authority, while also being more open to outside challenge and debate. It also means our contribution to public policy discussions will increase. This will build on our credibility, impact and influence, and will assist in our ability to act when intervention is required.

(2) Risk Appetite - Using Risk Management to Aid Our Decisions & Priorities

Part of our transformation includes placing more emphasis on how we truly integrate ERM practices, as a core part of OSFI’s decision-making processes and infrastructure. It requires us to define OSFI’s risk appetite considering our operating environment, and to specifically articulate the level and type of risk we are willing (and unwilling) to accept in fulfilling our mandate. Currently, there is no formal standard of practice to (a) identify priorities, (b) evaluate trade-offs between different priorities, and (c) understand what strategic investments may be necessary and appropriate for risks identified as priorities.

Overall, we require a consistent and accepted risk appetite framework across OSFI. Given that an overall defined risk appetite does not currently exist, risk appetite is applied differently as a tool across the organization. Consequently, there are differences in application and prioritization. This impedes our ability to make trade-offs across a full range of organizational activities and impairs our ability to manage OSFI as a single entity. The intensity and pace at which the risk environment is changing requires a reimagining of our approach to our risk appetite. We need a more rigorous and future focussed risk appetite framework that grapples with risks such as climate, digitalization, and other yet-to-be foreseen risks. Such a framework will enable a risk-led approach to priority setting and support greater consistency and rigour in selecting strategic priorities and related resource allocations.

The use of risk appetite statements is helpful in narrating the shifts expected under the Blueprint. The following are examples of the shifts expected:

Reputation & Credibility

• We are willing to invest in building our reputation further to fulfill our mandate.
• We are willing to accept the risks resulting from greater transparency and engagement (e.g. reputational risk) as we strive to increase our influence on public policy matters.

Decision-making & Risk-taking

• We are willing to place much more emphasis on psychological safety (safe-to-fail) and diversity (safe-to-be-different) in making business decisions.
• We are willing to make hard decisions based on imperfect information and risk being wrong but have a lower tolerance for making decisions too late.
• We are willing to move away from a risk-averse culture to greater risk-taking informed by robust analysis of risk trade-offs.

Intervention & Proactivity

• We are willing to accept the failure of an institution but have a lower tolerance for a disorderly or surprise failure.
• We are willing to quickly adjust and respond to what we see through earlier intervention and corrective action.
• We are willing to invest resources in developing opportunities and mitigating threats to remain effective in meeting the challenges of an evolving risk landscape.

Alignment & Accountability

• We are willing to consider organizational changes in favour of more efficient structures that more clearly define accountabilities and empower employees to make faster decisions.
• We are willing to invest to ensure our leaders and our staff are fully committed to our cultural values but we have a zero tolerance for having leaders and colleagues who do not exhibit OSFI’s values.
• We are willing to prioritize hiring and promotion of colleagues with strong leadership abilities and who exhibit OSFI’s values.

(3) Culture - Shifting Our Approaches and Experiences at OSFI

The success or failure of any organization all comes down to one critical and undeniable element: culture. Culture is the shared beliefs and values of an organization; at its core it defines the acceptable behaviours of its people. As such, it is a foundational element for any successful transformation. The transformational Blueprint necessarily asks us to reflect inwards and perform an honest and meaningful stock take of what we know about our existing culture and what we think will be needed to move us forward.

When we look at OSFI culture, it is one that consists of a highly professional organization. A culture where people are dedicated and passionate about the work they do. This is a gift for any organization and has been a key contributor to OSFI’s past successes. However, there are areas that will require attention to realize success.

The launch of our new corporate values - Respect, Curiosity, and Stewardship - in 2020 was an important milestone in identifying our aspirational cultural norms and is aligned with the needs of the Blueprint. Putting our values into action is therefore an essential part of the Blueprint as follows:

Embrace diversity, equity, and inclusion, reject exclusiveness

Including diversity, equity, and inclusion (DEI) in all that we do must be a deep commitment for everyone at OSFI. It is foundational for living Respect and Curiosity and moving forward we must hardwire diversity of thought into the core of what OSFI is and how it operates. This means delivering on a culture where it is not only safe to be different, but that difference is celebrated. The build and implementation of our DEI strategy will be central to this effort in informing all aspects of our human capital practices and thereby solidifying OSFI as an employer of choice. This is not just a business imperative, but a moral one and is an essential part of nurturing our people and culture capabilities.

Macro-responsive over micro-centric

We will need to shift our mindset in supporting Stewardship. Our current approach applies risk management at an individual institution level while the macro-risk environment is considered only in as much as it affects that regulated entity. The result is a deep ownership of the perceived magnitude of impact on public confidence when an entity fails, when the ultimate success or failure of an entity is the accountability and responsibility of its Board of Directors. While we will always prudentially regulate and supervise regulated institutions, how we manage the risks they face needs to be recalibrated to better balance the individual institution and the broader macro-risks it faces. And while this will possibly be the hardest piece of our transformation - changing how we approach and see our role away from the “tried and true” that has served us well in the past - this shift is both urgent and necessary so that OSFI can continue to be confident in meeting our mandate in the future.

Intensify focus on risk appetite, lessen bureaucracy

To fully realize our ambitious transformation agenda under Stewardship, we will need to simultaneously cultivate the passion that has served us so well in the past, while also looking to develop a greater risk appetite in our people. This will allow us to make decisions more quickly and confidently, while managing the risks associated with greater speed and agility. In turn, this will give us the dexterity and confidence to be able to manage the rapidly evolving risk environment we face, and thereby reduce any excessive bureaucracy within decision-making structures (a likely consequence of our collective and individual risk aversion). This will involve cultivating a culture that focuses on risk appetite, as part of personal accountability and individual leadership at all levels in OSFI.

Efficiency over perfection

The size, scope, and speed at which risks present themselves make it difficult to control and manage all those that manifest. To advance ourselves against this backdrop and support Stewardship, we will need to prioritize and quickly assess the macro-risks that present themselves and the degree to which we will be able to manage and mitigate them. Ultimately, this will mean there are some risks we will manage and watch closely and others that that we will take a less rigorous approach to. In doing this, we will simultaneously increase our risk appetite and our risk tolerance, but it will also mean that at times, we will need to make imperfect decisions based on incomplete information.

Innovation over status quo

To not only survive but thrive in an increasingly uncertain risk environment, we will need to foster a culture that embraces and creates innovation. At its core, an innovative environment is one in which there is an openness to break from the status quo and try doing something differently; it is about Curiosity. It allows us to transform those parts of our work that don’t serve our mandate and allows abandonment of tools, techniques, and practices that are no longer fit-for-purpose and/or are not performing how we expected them to. It is about constantly learning from our attempts and embracing failure quickly and proactively as a step in the learning process.

Transparency over harmony

Transparency is difficult; transparency can give rise to conflict. But managed constructively, transparency ultimately creates trust among colleagues. Trust comes not from the communication of tough or easy messages, but when our colleagues believe what we tell them. In other words, you get trust by having no surprises. Perilous risk environments and the organizational cultures capable of managing those environments require transparency. By transparency we mean, empathetic truth-telling about the risks OSFI faces and the weaknesses and strengths that inform our adaptation to those risks. We are passionate about the opportunity and benefits of creating great leadership in the public service and we will be successful in pursuing those opportunities only to the extent we are clear-eyed about our collective and individual strengths and weaknesses. We also recognize that, as a prudential financial services regulator, some information is private and confidential. But, in so far as it relates to leading OSFI forward, our first tendency is toward openness and transparency regardless of position or rank.

More connected and aware, no complacency

The risk environment is highly complex and consists of risks that no single perspective can capture or adapt to. It has become a strategic imperative that we create and seek out cognitive diversity to include an expanded network of stakeholders, partners, and the public. While existing networks and relationships have been useful, we must build on these to find pathways to new and rich perspectives, consistent with Curiosity and Stewardship. Internally, we must create an environment where open and honest conversations can occur about risk, and individuals are comfortable to voice their views. Ultimately, this will be how we continue to safeguard Canada’s financial system by ensuring open debate and effective challenge of OSFI’s potential blind spots.

Section C: The Implementation of the Blueprint

To make the transformation real, we require a clear vision and mission, with supporting initiatives to aid implementation. This section outlines these items in further detail.

(1) OSFI’s Vision & Mission for Transformation

When we reflect on the imperatives of the risk environment as well as the operating needs for OSFI, a clear narrative comes into focus about the ultimate outcome of this transformation, our “true north” destination. To explain this further, we have a vision and mission statement for transformation.

Vision

We are transforming OSFI to ensure that we thrive in intensifying uncertainty so that the public’s confidence in a sound financial system remains unwavering.

Mission

We will achieve this by:

• ensuring that at the core of all we do is a culture of curiosity that fosters acceptance of diverse mindsets, where it is safe to be different and safe to fail;
• increasing our personal and organizational agility;
• being courageous and bold in making decisions that are driven by our risk appetite and informed by exceptional analysis and insights;
• taking actions that are timely, well understood in terms of the risk trade-offs involved, and result in followership and influence; and
• being more deliberate in influencing policy-making to strengthen public confidence in the Canadian financial system.

(2) Investing in Six Transformation Initiatives to Support Change

OSFI’s transformation vision defines a bold determination that goes beyond incremental change; it is an opportunity to transform our organization and operating model to deliver on our mandate. To supplement the strategic focus on mandate, culture and risk appetite, there are six specific initiatives that form part of the Blueprint and will be essential in supporting OSFI’s transformation:

1. Culture Initiatives
2. Risk, Strategy and Governance
3. Strategic Stakeholder and Partner Engagement
4. Policy Innovation
5. Supervisory Framework
6. Data Management and Analytics

The following provides a brief overview of each initiative with further details expected to follow as part of updating our Strategic and Operating Plans.

Culture Initiatives

Aspiration: OSFI is a workplace where curious, diverse, high integrity colleagues are safe to bring their true and best selves to work everyday and are safe to fail and then adapt.

Culture is the critical success factor for any transformation. As such, the implementation of the Blueprint - specifically, the shifts in culture identified in Section B (3) - will place culture change management at the centre of our efforts and investments. This will involve the following actions:

• Developing and executing an updated Human Capital Strategy that embeds OSFI’s values in how we operate and supports this by identifying promises and commitments by our people leaders and staff, including the implementation of diversity, equity, and inclusion efforts.
• Implementing ongoing monitoring of OSFI’s fidelity to cultural promises and commitments, including the use of 360 reviews and regular surveys on our culture, to ensure alignment and accountability across all levels of the organization.
• Reviewing competency models and performance assessment methods to hone accountability to focus on ‘the how’ as much as ‘the what’.
• Implementing the requisite training and support for leaders and staff to nurture the fulfillment of OSFI’s promises and commitments.

Risk, Strategy and Governance

Aspiration: OSFI makes risk-intelligent decisions everyday that reflect our transparent and revealed risk appetite via leadership and governance that delegates out decision-making, from the top to the leaders best positioned to make decisions.

Informed and timely decision-making requires a reliable view of our risk posture with suitable governance structures to reinforce alignment and decision-making. To do so, OSFI needs to go beyond relying on its people and its culture traditions; it needs to adjust its structure to the way it achieves its mandate by embedding risk management practices to drive strategy and operations. This will involve the following actions:

• Establishing a new Enterprise Risk and Strategy function, headed by a new Chief Risk Officer (CRO) with direct reporting to the Superintendent. This new function will leverage existing planning, risk management and governance capabilities, and will be accountable for building and embedding ERM practices at OSFI. This will drive strategic insights and advice, including the associated expectations for internal (risk) governance.
• Designing and implementing an enterprise-wide risk appetite framework with supporting ERM practices.
• Embracing the three lines of defense model by implementing a true second line of defense that provides effective challenge to the operation of the first line - the OSFI sectors and OCA - and reflects the expectations we have for our regulated entities^{Footnote 2}, with Internal Audit continuing to provide independent assurance, as the third line of defense.

Strategic Stakeholder and Partner Engagement

Aspiration: OSFI integrates and aligns with key stakeholders and partners inside and outside of the federal financial safety net in a manner that maximizes its influence and preserves its integrity in fulfilling its purpose and mandate.

Our transformational agenda requires us to be bolder and to maximize OSFI’s influence in all matters pertaining to our mandate. Our independence affords us a level of influence on public policy, and we need to be able to leverage all tactics available to us to address risks on the horizon. Our public policy contribution will therefore increase, and we will need to build our credibility and impact. To do this, we will need to be more forthright in sharing our perspectives and authority, while also being more open to outside challenge, debate, and scrutiny. We also need to leverage the expertise of our partnership ecosystem in both the public and private sectors so that we can mobilize resources as dictated by the changing environment. This will involve the following actions:

• Developing an integrated approach to external stakeholder management to manage an intensifying public policy environment. A central function will leverage existing resources and efforts.
• Developing an integrated strategy for managing major public policy files by making more effective use of the Superintendent’s and the Chief Actuary’s public presence and the broader external stakeholder ecosystem.
• Using the Financial Institutions Supervisory Committee (FISC) more effectively as an accountability mechanism for OSFI.
• As part of our operating model, imbedding the partners whose work we will leverage to expand our reach into how we work.

Policy Innovation

Aspiration: OSFI becomes a global leader in prudential supervision by making policy to ensure operational and financial resilience of its regulated entities in the face of climate-related, digitalization, and other yet-to-be foreseen risks.

The risk environment offers increasing uncertainty and OSFI needs to be ready to respond strategically to new risks as they emerge, quickly and effectively. Policy innovation and development usually follows as a first response to an emerging risk, followed by supervision and review. However, too often our analysis and response to address risks is too slow and/or underfunded. Our experience with work on digitalization, including related technology risks, as well as climate change and changing societal demographics are good examples of this experience. OSFI will therefore need to mature its risk response capabilities. This will involve the following actions:

• Developing and implementing a strategic response framework for emerging risks that reflects a life cycle in prudential oversight, from policy innovation, through to policy setting, and onto supervision and ongoing review.
• Establishing more focussed and applied research capabilities to improve our identification and analysis of emerging risks both in the supervisory and regulatory environments, and in respect to the statutory responsibility of the OCA.
• Establishing an expanded and dedicated team for climate risk that builds out the work of the climate risk working group.
• Advancing our analysis and insights and expanded skillsets with respect to digitalization of business model disruption, societal changes, cyber risk, digital money, third-party risk management, and operational resilience.

Supervisory Framework

Aspiration: OSFI’s Supervisory Framework guides supervisors to efficiently manage their portfolio of regulated entities, liberating them for true, value-added tasks and eliminating unnecessary burdens.

OSFI’s Supervisory Framework underpins our supervisory practices and is the central record of how we assess and respond to risk in regulated entities. However, the Framework is dated and in much need of upgrade to ensure methods are fit for the risk environment. Risks have become more diverse - especially through the advancement of new technology - while best practices at other supervisory authorities include increasingly employing their own forms of technology or “sup-tech” to maintain sound and timely risk assessment capabilities. This will involve the following actions:

• A substantial investment in updating and ongoing maintenance of the Supervisory Framework to better reflect the assessment of financial risk, non-financial risks, and operational resilience for regulated entities.
• Building greater risk appetite for earlier corrective actions into the Supervisory Framework.
• Developing more differentiated risk ratings for institutions, particularly for Stage 0 institutions.
• Implementing enhancements to OSFI’s supervisory management system (VU 2.0/3.0) to achieve better data quality, effective reporting of risk and more insightful analyses.

Data Management and Analytics

Aspiration: OSFI’s data platform enables the vast majority of analytical research and insight-generation while simultaneously eliminating the necessity of most ad-hoc data requests made to regulated entities.

Good data is essential to ensure strong regulation and supervision; it is also critical for operating OSFI effectively and efficiently. While OSFI has made good progress on executing against its enterprise data strategy there is much work remaining to truly embed digitalization at OSFI. To support exceptional analysis and risk analytics insights, data must become more usable, timely, credible, and granular. This will require greater digital literacy and better infrastructure to drive capability gains across OSFI and will therefore involve the following actions:

• Executing a medium-term strategy to restructure OSFI’s data environment, including in areas of data quality, data engineering, and advanced analytics.
• Further promoting analytical innovation and user cases across sectors, assisting with analytics governance, while also creating a centre for analytical expertise and learning for staff.
• Supporting all OSFI enterprise functions with improved data and analytics capabilities.
• Providing training and support for all staff to enhance general data literacy skills.

Section D: Next Steps

(1) Overview

The Blueprint offers a direction for transformation. It offers a narrative for change and some additional detail on actions and areas of emphasis. Further work must now occur to turn these words into action and the purpose of this section is to outline the immediate next steps in this regard.

There are several factors that will be critical to the implementation of this Blueprint. This includes a robust change management effort, as the Blueprint will be a seminal document in guiding OSFI’s overall direction for the next few years. As a result, there will be multiple operational plans over the years to ensure that our transformation is reflected in specific and tangible goals that can be assigned, monitored, and completed.

(2) Change Management

To support the implementation and successful rollout of initiatives stemming from this Blueprint, the Executive Committee will be leading the change by supporting staff and investing in the necessary change management infrastructure, including dedicated resources to oversee the transformation. Employee engagement at all levels will be essential. We will be providing information through all-staff gatherings, staff communications and other activities to keep you informed. We will equip managers to be able to discuss the changes with staff and we will keep you updated on our collective progress throughout the process.

But we cannot be successful without you. Indeed, the Blueprint sets out an expectation for greater individual accountability and ownership as it speaks to mindset as much as the work itself. We will need your help and participation throughout. We ask that you be curious about the change - read the information provided; ask questions to your manager, your colleagues and to Executive Committee members; express your thoughts on the transformation, and; help us find solutions to the issues or questions that arise as a result of this effort.

Our Senior Leadership cadre will have a critical role to play during this process. The Executive Committee will be looking to them to help us lead by example and, as well, turn the Blueprint into tangible actions via the design of the next OSFI Strategic Plan.

(3) Focus on the Future: Getting Ready

One of the methods by which we measure the implementation of the Blueprint will be the ability of the organization to edit and rationalize its work. By realizing this transformation in full, we will be seeking to examine our existing work activities and make decisions about what activities are no longer fit-for-purpose or in need of reimagining. In some cases, work and activities may need to be stopped altogether so that our finite resources can be focused on work that matters most.

To start, each Sector will perform a prioritization exercise of their existing 2021-22 Sector Plan deliverables in preparation for the launch of the new Strategic Plan and Operational Plans. The Executive Committee will also review our corporate initiatives (e.g., Project Mimosa) and artefacts (e.g., our Compass), and will archive those that may risk confusing messaging and expectations for staff given their overlapping nature with the Blueprint.

Going forward, we will find innovative ways to prioritize our work effectively. At the organizational level, we will be leveraging our new focus on ERM and overall risk appetite to support our ability to prioritize our work. We will also be considering news ways of working, including using methodologies such as crowdsourcing, six sigma, efficiency contests, sprints, and others to help us focus on what’s important and achieve results more quickly and effectively.

(4) Production of the Strategic Plan and the Operational Plan

The development of the new Strategic and Operational Plans will commence with the release of this document and will involve senior and operational management. We expect these plans to be completed this fiscal year, so that that the deliverables outlined in the plans align with the start of the new fiscal year, April 1, 2022 (for operating year 2022-23).

The Strategic Plan, which is an internal and external facing document, will be developed by a cohort of senior leaders, with representatives from each Sector and the OCA. The strategic goals and priorities in the Strategic Plan will form the basis for a single, enterprise-wide Operational Plan that will replace the current structure of individual Sector Plans. This will address inconsistencies and promote greater alignment across the sectors.

Once in place, OSFI will look to reporting processes to allow the Executive Committee and senior management to understand progress on priorities and to report back to all staff on progress as part of our commitment to the organization. Appropriate reporting mechanisms will be confirmed as the design of the Strategic and Operational plans becomes clearer.